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Case Comment: Oakwell Engineering Ltd. v. Enernorth Industries Inc. (2005) 76 O.R. 528 (S.C.J.); appeal dismissed, (2006) 81 O.R. (3d) 288 (C.A.); leave to appeal dismissed, [2006] S.C.C.A. No. 343 (S.C.C.).
Published in the Feb 2007 issue of Transportation Notes - View Article
The Supreme Court of Canada recently denied leave to appeal in a case involving an Ontario corporation that resisted enforcement of a Singapore judgment, alleging that the courts of Singapore are inherently biased and corrupt.
Oakwell is a Singapore corporation that had a building contract with Enernorth, an Ontario corporation. The project resulted in many disputes which were resolved by a Settlement Agreement. The Agreement provided that any further disputes would be governed by Singapore law and be subject to the non-exclusive jurisdiction of the Singapore courts. Oakwell brought an action for breach of the Agreement in Singapore. Enernorth defended and counterclaimed. Enernorth lost at trial and appeal in Singapore. Oakwell brought an application in Ontario to enforce the judgment. Enernorth opposed enforcement, alleging that the Singapore legal system does not conform to the Canadian concept of justice. Oakwell’s application for enforcement was granted by the application judge and upheld by the Court of Appeal.
The application judge in Ontario, Justice Day, followed the Supreme Court case of Beals v. Saldhana, noting that the test for enforcing foreign judgment requires considering whether the foreign court properly assumed jurisdiction (the “real and substantial connection” test) and if it did so, whether the opposing party has succeeded in proving any available defences, such as fraud, public policy or denial of natural justice. The application judge held that the judgment was prima facie enforceable. It was supported by the forum selection clause in the Agreement and the fact that both parties had attorned to the jurisdiction of the Singapore courts. He rejected the public policy defence, noting that the defence requires a finding of repugnant foreign law, not repugnant facts. It was the latter that formed the basis of Enernorth’s complaint.
Enernorth offered some evidence of possible bias on the part of the trial judge in Singapore but this fell far short of proving actual bias as would have been necessary for success.
Enernorth also tendered expert reports to support the argument that there are connections among the Singapore judiciary, executive and business. It argued that these posed a real risk of bias and further that the legal system in Singapore is not adequately independent for its judgments to be recognized and enforced in Canada. At all levels in the Canadian proceedings, this argument was rejected. The courts concluded that there was no evidence that the Singapore judiciary could not fairly decide private commercial disputes.
The application judge noted that Singapore law is derived from English common law and that the Constitution provides for independence of the judiciary. In any case, Enernorth participated fully in all legal proceedings brought in Singapore and in these circumstances its claim of absence of natural justice was doomed to failure.
Finally, Enernorth raised the bias issue neither at trial nor at appeal in Singapore. It submitted that its failure to do so was for fear of breaching the Sedition Act. This explanation was not found to be compelling.
In general, we believe that Canadian courts will recognize and enforce foreign judgments in the absence of specific bias in an individual case. It is not enough to bring forth evidence on the general lack of independence of a foreign judicial system and expert evidence directed to this point alone will not avail.